But it's a fractional reserve system with respect to fiat currency. The price of Bitcoin is supported only by a fraction of its market cap in real fiat money. I

But it's a fractional reserve system with respect to fiat currency. The price of Bitcoin is supported only by a fraction of its market cap in real fiat money. If everyone decided to sell all Bitcoins in existence on the open market, the total amount of fiat that they would get for it would not match the total market cap of all Bitcoins before the selloff started.